InsideSales.com Inc. has raised $100 million at a valuation of nearly $1 billion, Venture Capital Dispatch has learned, in what one investor called one of the most competitive deals he’d ever been involved in.

David Elkington, founder and CEO of InsideSales.com

InsideSales.com

The company, whose predictive analytics software tells salespeople whom they should call at what time to get the best chance at closing a sale, was pursued by 25 venture capital firms and received about 10 term sheets, according to co-founder and Chief Executive David Elkington. He said he turned away more than $200 million in additional funding.

“It was challenging to coordinate this many strong personalities,” Mr. Elkington said. “…I was speaking to 25 of the brightest people in the world.”

Polaris Partners led the round and was followed by Kleiner Perkins Caufield & Byers, which at $25 million made its second-largest investment in an enterprise company ever. The investment came out of Kleiner’s $1 billion digital growth fund, the firm said.

Polaris, meanwhile, invested “sizably more than anyone else,” according to a person familiar with the deal.

InsideSales.com, which started in Utah in 2004, was inspired by ideas that Mr. Elkington had as an undergraduate student of philosophy on how humans learn and know. Other than from his mother-in-law, who he said invested between $10,000 and $20,000, the company took no outside money for more than six years.

Instead, Mr. Elkington began building a software platform and amassing data, settling on sales and trying to figure out how salespeople could be most effective.

Although the software integrates with Salesforce.com and other customer relationship management systems, over time the data InsideSales pushes into its platform has become more and more diverse. The software also learns which data is most relevant so it can make increasingly accurate predictions on what salespeople should do next.

One attraction for investors is the dearth of good tools for corporate sales forces, whose members have to churn through calls and are required to operate by gut instinct because they don’t have access to good data on how to do their jobs, according to Kleiner Perkins Partner Matt Murphy.

In addition, he said, the platform’s data and its gamification features, which help sales reps learn to be more productive by studying their and their colleagues’ performance, could move beyond sales into human resources, customer service and other corporate functions to help companies operate more efficiently and make more money.

“I believe InsideSales can be an extremely large company,” said Mr. Murphy, who called the funding round “one of the most competitive financings I’ve ever been involved in.”

InsideSales.com has applied for more than 20 patents and has had eight or nine approved, Mr. Elkington said, including one on how to analyze many interdependent factors–weather, the stock market, gas prices and so on–that can go into predicting when people buy and how salespeople should work.

“We’re able to make much more accurate predictions because of the complexity of human nature and how we look at all the other things we’re doing as we’re making decisions. [The software] accommodates hundreds or thousands of additional data points,” Mr. Elkington said.

InsideSales.com has now raised $140 million. The new money will be used for international expansion and to hire salespeople, engineers, coders, data scientists, research scientists and “as many STEM-based [science, technology, engineering and mathematics] PhDs as we possibly can,” he said.

Although an IPO is not necessarily a goal, Mr. Elkington said, and he may raise more money, he does want to build InsideSales.com into a multibillion-dollar company.

As part of the investment, Polaris Managing Partner Dave Barrett, who worked previously with InsideSales.com’s Chief Marketing Officer Mick Hollison and who put the investing syndicate together, joins InsideSales.com’s board as an observer.

Comments (5 of 12)

looks like friends of the company wrote most of the comments here.
they are way too positive.
where is the proof any of this actually works?
i mean real proof and not some bull from a study the company can pay for.
i dont believe in any of this stuff
and gamification has been "proven" to be bad for sales teams
it was a buzzword a few years ago
I call bull on this company.

12:03 pm June 27, 2014

JC wrote:

This is an excellent article about the rise of Inside Sales. InsideSalesBuilders.com is another company that's on the rise.

9:27 am May 19, 2014

Eli wrote:

What an exciting time to be a part of such a great company. InsideSales.com really is the Google in the sales space. I can't wait to see the progress over the next few years.

1:12 am May 18, 2014

Mike T wrote:

Google started with search. Insidesales started with the dialer. Google now has an empire of products and I bet we will see more innovative products to come from insidesales.com. Why else would we see so many of the worlds best investors go after this round of funding?

5:24 pm May 16, 2014

Brad wrote:

I'm excited to see how this added fuel will add to the fire. It will be fun to see the software become an essential building block for sales teams.

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Produced by the editors of Dow Jones VentureWire, Venture Capital Dispatch tracks the fast-moving developments at the intersection of high-tech innovation and venture capital finance. Featuring the VentureWire reporting team in the Silicon Valley, New York, Boston and Shanghai tech centers, Venture Capital Dispatch provides insight into the newest start-ups and latest trends in venture capital investing. Write us at VCdispatch@dowjones.com. For more information on Dow Jones products covering venture capital and other financial markets, go to http://pevc.dowjones.com.